Gold Gains Ground After Two Days Of Declines

After trading to lower prices on Monday and Tuesday of this week, gold has staged a moderate recovery. Monday’s action resulted in a $10 drop in price, this occurring after a phenomenal rally which began on Thursday, May 30. This would mark the beginning of seven consecutive days which resulted in higher closes when compared to the previous day. In fact with the exception of one day, June 6, the remaining six trading days could all be characterized as having a higher close, a higher high and a higher low than the previous day. Although in terms of time duration this leg of the rally was rather brief, however in a short period of time gold managed to gain approximately $80 in value.

There are two primary underlying events would certainly have a bullish effect on gold prices. First was the uncertain outcome and timetable of the current trade war between the United States and China. It is widely acknowledged that the longer this issue is not resolved the more potential there is that the result will be a major slowdown in the global economy.

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Secondly, there were comments made by both the Federal Reserve Chairman, and president of the St. Louis Federal Reserve Bank which underscored their readiness to act with rate cuts to “continue the economic expansion”. Although market participants had been factoring in a possibility of two rate cuts is here, by Friday of last week the consensus believe that there could be as many as three rate cuts in 2019.

One minor event was the addition of the real possibility that Trump would impose a 5% tariff on Mexico which was set to begin on Monday, June 10. In an 11th hour deal this action was averted which gave some relief to equities traders who feared the worst if Trump did begin to tax Mexican imports to the United States on Monday.

More importantly many traders believe that the Mexican standoff was a minor thorn in the trade war between our two superpowers. With no resolution in sight until the G-20 meeting which will be held later this month, traders can only speculate and wonder what type of timeframe it will take for the two countries to come to an equitable solution which works for both superpowers.

Our current technical studies indicate that the recent decline in gold prices most likely will be shallow and short-lived. Although today’s six dollar gain does not confirm that this minor correction has concluded, it is certainly a move in the right direction.

Our technical studies indicate that the first level of potential support is at $1334.30, which is a .23% Fibonacci-based retracement covering the length of the last rally from $1273-$1352. Below that the next level of support is at $1322.50, this is the .38% Fibonacci retracement level. We also believe that the lowest gold prices could go, although unlikely would be $1310 to $1313 which is a 50% Fibonacci retracement.

It is our current belief that gold will inevitably find support at one of the three levels we spoke about above and following the conclusion of this minor correction has a high probability of making a new record close for the year of 2019.

Wishing you, as always, good trading,

Gary S. Wagner - Executive Producer

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Gold Forecast: Proper Action

We are currently flat after taking profits yesterday. On opening weaknees, when gold was down $8.00, we took our stop to the market.. Long @ $1293.10 Out @ $1338.10 = $45.00 per ounce, or $4500 per contract.

Thursday morning, May 30, we sent out this message -Trade Alert: buy August 2019 gold @ the market. Respectable move today in gold which is currently trading up $6.80 to $7.00, basis the August 2019 contract and fixed at $1293.10.

Gold Market Forecast

We remain bullish for gold on a long-term basis, however Sundaywe got the short term pause in this rally we have been waiting for..

Support for gold continues to be attributed to statements by Federal Reserve Chairman Jerome Powell who alluded to the potential for rate reductions this year to continue the economic expansion. This coupled with last Monday's statement by the president of the St. Louis Federal Reserve Bank, James Bullard is significant in that it illustrates real support for rate cuts if needed. Last weeks Labor department Jobs report came in well under exceptions. 175,000 new jobs were forecast and the actual number was only 75,000, are supportive of rate cuts.

Sentiment Indicator:

Gold -> Bullish

Silver -> Neutral

S&P 500 -> Neutral

Bitcoin -> Bullish

Bitcoin fundamentals by Joseph M. Wagner II:

Coinbase announced that its Visa debit card which can be used to make purchases and withdraw cash from ATMs, instantly converting your digital assets into fiat currency and is now launching in six more major European countries. The Coinbase debit card was originally launched in the U.K. in April and will now be available and excepted in Spain, Germany, France, Italy, Ireland and the Netherlands to anyone with a Coinbase account. This is another major leap towards wide spread acceptance of crypto assets.

On the security side some big headway is also being made. The largest bank in South Korea, KB Kookmin, is launching the first digital asset custody service platform in a nation were crypto awareness is highest amongst anywhere else in the world with an astonishing 87% of the country’s population. At one time South Korea accounted for a third of the crypto market and the largest holders of Ethereum, since then however the South Korean Government has cracked down on ICOs (Initial coin offerings) by making them more expensive due to high taxes imposed on South Korean exchanges, this only opened the door for Chinese exchanges to dominate the east Asian market.

In the futures markets BTC #F is trading up by roughly 3% on the day and seems poised to break out of the recent narrow range of $7,500 to $8,000 and currently are trading above $8,000 at $8,125 with a high today of $8,340. On a technical basis a Golden cross between the long term 100 and 200 day moving averages seems imminent and Bitcoin bulls seems ready to retake the reigns.

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DISCLAIMER: Before deciding to participate in Gold or Silver investments, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly with futures activity do not invest money you cannot afford to lose. There is considerable exposure to risk in any futures exchange transaction, including, but not limited to, leverage and market volatility that may substantially affect the price of gold and /or silver. Moreover, the leveraged nature of futures trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. Past performance is not a guarantee of future profits or benefits. Invest wisely.